TABLE OF
CONTENTS
Title Page
Certification i
Dedication ii
Acknowledgement iii
Table of Contents iv
Chapter One
1.1 Introduction 1
1.2 Aims and Objectives of the Study 2
1.3 Rational of the Study 4
1.4 Scope and Limitation of Research 5
1.5 Historical Background of the Subject Matter 6
1.6 Limitation of the Study 8
1.7 Definition of the Key Terms 10
References 12
Chapter Two
2.0 Introduction 13
2.1 Coca-Cola 13
2.2 Channels
of Distribution 16
2.3 Type of
Channel 16
2.4 Strategy
Criteria for Choice of Channel 22
2.5 Type of
Distribution Strategy 30
2.6 Implementation
of Channel Plan 33
2.7 Satisfying
Buyer Requirement 33
2.8 Factor
Affecting Choice f Channel 34
References
36
Chapter Three
3.0 Summary of Findings, Conclusion and Recommendation 37
3.1 Conclusion
38
3.3 Recommendation
39
References
41
CHAPTER ONE
1.0 GENERAL
BACKGROUND OF THE STUDY
The
type of distribution policy/strategy exercised differs from one organisation to
the other, depending on the type of goods and services provided or produced in
such business organisation. In considering the importance of distribution
strategy on organisational profitability or before an organisation settles for
the type of distribution policy to be used, two things has to be considered;
i.
Knowledge of various marketing channels
available is one thing
ii.
Developing a sound system is another
thing
The
effectiveness of an excellent marketing executive however is in his ability to
select and obtain channels which will maximize sales and minimize cost.
In
selecting marketing channels, one must understand that, they are not rigid,
rather they are dynamic. In essence the impact of distribution strategy on the
organisational profitability of Coca-cola is that it helps to strengthen and
make organisation’s marketing conception in terms of place and ability
possible.
However,
when a wrong system of distribution is being used by an organisation, such
organisation is bound to fail but it the right peg is being put into the right
hole success is bound to be attained.
1.1 AIMS
AND OBJECTIVES OF THE STUDY
The
motive behind the study is to seek and explain what will be the impact of distribution
strategy on organisational profitability of coca-cola. The essence of choosing
coca cola is because of the fact that must Nigerian manufacturers are producers
of such consumer goods. This study intends to seek the distribution strategy
that they make use in getting the goods to the ultimate consumer or user and
the impact of such strategy on the profitability of the organisation, and
overall of achieving the target of any marketing form, which is consumer
satisfaction, whether the impact of these stated focus are favourable,
otherwise has no impact at all.
The
study would also look at various distributor strategies that are open to
manufacturers, from which they can make their choice depending on the market
coverage, product characteristics of each and how each of the earlier mentioned
strategies can be adopted for coca cola. In order to be able to cover all the
aims and objectives of the study, it would require an extensive research
involving some of the department or units in the Nigeria Bottling Company Plc,
Agidingbi Ikeja Lagos, but due to some constraints just two departments would
be able to make use of this research i.e. sales/marketing and distribution
department.
The
organisation was chosen due to the position it occupies as one of the leading
organisations, more so a market leader in its sector (soft drink sector). Hence
much reference would be made to the company.
1.2 STATEMENT
OF THE PROBLEM
The
problem this study is meant to examine is that of distribution strategy adopted
by Nigerian Bottling Company. This in effect, affects the producer, is that
they are not to exploit the market of their potential customers not reached,
while even the present consumers are not given the utmost satisfaction they are
supposed to enjoy from the product.
Morever,
distribution problem full capacity in terms of manufacturing. This study wants
to find out the exact problems and how best they can be solved, and what
advantage hope to gain soon when applying the various distribution strategies
in distributing coca-cola and its impact on organisational profitability of the
product (coca cola).
1.3 RATIONALE
OF THE STUDY
A
study of this nature, though for academic purpose can also be of help to the
producer in bringing out problems encountered in distribution and how they can
overcome such problem. Also, it will analyse the best way or method to maximize
sales.
The
study will also examine how a good distribution strategy can be good positive
influence to the producers and how it will help him (producer) in achieving his
organisational goals and objectives, more so, making the marketing concept
realistic. This is because production is not complete until the products get to
the ultimate consumer. The fact that adoption of a distribution strategy will
help (NBC) in improving its production capacity, as we know that distribution
problem together with other problem is the cause of under utilization of most
product.
Moreover,
the study will also examine bristly, the role of public authority (governors) in
alleviating and improving the distribution of coca cola, because of the fact
that some of these problems (external factors) are not what producer can solve,
hence, the producers requires the help of the government to overcome them. For
instance i.e. the issue of good infrastructure like roads which link up the
producer to the consumer are much left to the public authority than for the
private sector to embark upon.
1.4 SCOPE
OF THE STUDY
This
study intends to examine the impact of distribution strategy on the
organisational profitability of coca cola and as a result would carry out only
the necessary areas which includes distribution channels, types of channels and
this is important because the first step in designing a distribution strategy
is to decide on the kind of distribution channel to be adopted.
Also,
the study tends to examine the various distribution strategies that a firm
would be interested in using to distribute its products; most especially the
type being used by the Nigeria Bottling Company (NBC) in distributing
coca-cola.
Moreover,
the study will bring out what impact these strategies will have on
organisational profitability of coca-cola and the problem encountered making
use of such a policy, what can be done to improve the systems, the effect it
has on sales of coca cola.
Criteria
for choosing the best channel is also important and it will be analysed because
of the relationship that distribution channel has on each of the distribution
strategies and the roles that channels play in making the product gets to it’s
final consumer.
The
study will make reports on the distribution activities in Nigeria Bottling
Company Plc and how their distribution policy is affecting the sales of coca
cola whether positively or reverse.
1.5 HISTORICAL
BACKGROUND OF THE SUBJECT MATTER
The
history of Nigeria Bottling Company is almost as old as Nigeria itself.
It is one of the largest companies established in the country.
A
young man named A. G. Leventis arrived at Abeokuta
in (1922) as the sales agent of A. J. Tanagalakis and Company, with this
development the group was laid for the establishment of the company, but it was
to be for a short period of time when the company choose to start it’s
operation at Ghana
in (1937). This market strigger the beginning of A. G. Leventis business in West Africa. The development led to such establishment in
Nigeria
following leventis company’s operation in Nigeria received a boast and more
focus, due to the fact that IE’s business interest in Ghana never
sold to this government in (1962).
This
focus led to greater development or improvement in the companies operation
within the country that is Nigeria
and it’s name was changed from leventis to Nigerian Bottling Company (NBC).
In
(1952), NBC was incorporated and this could be said to be the beginning of the
company life cycle. The first NBC plant was commission in (1953). This was
situated as the basement of the company’s began and in (1955) the Ooze size of
coca cola bottle was introduced into the market.
The
major landmark history of the company includes: after initiating bottling
operation at Oyingbo, the first plant to be opened was at Apapa. This followed
by another landmark in the company’s history in which volume sales surpassed a
million naira (N1,000,000) in 1961.
With
this increase in sales the company had money to diversify from one brand to
another. Such flavours like: sprite, fanta grape, club soda, fanta tonic and
others were introduced in (1961). This diversification led to further increase
in the sales volume and also made the company a major competitor in the market.
An expansion was realized in the company’s operation
due to this success. For example, with the increase in sales experience in
1961. The Ibadan
plant was opened in the same year. This also led to further expansion with the
advert of other plants in the 1970’s in different parts of the country. The
list of other plants established during this period are:
i.
The plant at Benin in 1970
ii.
The plant at Jos
in 1972
iii.
The plant at Enugu in 1975
iv.
The plant at
Ikeja in 1978
v.
The plant at Ilorin in 1979
1.7 LIMITATION OF THE STUDY
It is generally accepted that there is nothing in
this world without it’s limitation, this also applied to this term paper. Some
of the limitation in writing and confirming the topic on which this term paper
is based are discussed below.
FINANCIAL PROBLEM:
The cost of conducting the research with the cost of
carrying out the research in some part of the company was relatively expensive.
This has discourage and given many student problems in writing their term paper
especially who are not financially buoyant.
BOOK CONSTRAINT
There were no enough textbook which could be
consulted in the library, the books available for consultation does not contain
enough and the required information. Besides, the student were not allowed to
take any material out of the premises or even to make photocopy of any of it.
UNWILLINGNESS OF
THE RESPONDENT
There was no adequate statistics or essential
issues, getting reliable information concerning the topic, even the company was
reluctant to give their articles in distribution strategy. They feel insecure
and therefore not giving any information minded thinking it will be used
against than.
1.8 DEFINITION OF THE KEY TERMS
·
DISTRIBUTION:
This task is ensuring that goods and services produced by the organization are transported
from place of production to the point of consumption as efficient and
economical as possible.
·
CHANNEL OF DISTRIBUTION: This is the combination of institutions or bodies
through which the product passes to reach the market. It usually starts from a
producer and ends with the buyer.
·
DISTRIBUTION POLICY: This is the policy which determine the number of
middlemen handling the products and services and it is adapted by the
manufacturer to serve as guide for their choice of distribution channel.
·
SALES VOLUME:
This is the sales figure for a particular goods and services over a period of
time. It’s earning of manufacturer from his sales of his product expressed in
monetary value.
·
SALES REPRESENTATIVE: They are the link between the organization and the consumer’s.
·
DIRECT CHANNEL:
This is the situation where the product are been distributed directly from the
producers to the consumers through the help of the supervisor of the company.
·
INDIRECT CHANNEL:
This is the use of middlemen as intermediaries that distribute the product
between the producers and the consumers.
·
PRODUCT:
A product is anything that can be offered to the market for attention,
acquisition, use or consumption.
·
MANAGER:
This is the person at the helm of affairs charge with the responsibility of
controlling other staffs in an organisation to attain set goals of such
establishment.
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